I thought I would post the top 10 audit red flags: Making too much money: The higher your income, especially over 1 million, the greater chance of audit Claiming Rental losses: you can take these,but must meet passive income rules Failing to report all taxable income, especially income reported to you on IRS form 1099...Read More

How would you like to substantially cut your social security taxes and Medicare (Otherwise known as FICA taxes)? Here is a trick known by most tax planners: Form an S corporation. This is a corporation whose income and losses flow through to you. The trick is to pay yourself a reasonable salary first and to...Read More

This is part II of the blog for Hobby vs. Business. There are several criteria used by IRS or CRA in determining whether you are running your endeavor as hobby or as a business. The key is to meet the majority of these factors: 1.Do you have a business plan: This is a plan of...Read More

If you are in business and have a profit, that is great. However, if you have losses, normally the losses can be used against any form of income such as dividends, other income from jobs, rents, pensions etc. If the losses from a business exceed your total income for the year, you can carry back...Read More

Don’t listen to the idiots: There are a number of well dressed, seemingly knowledgable people who are saying things like:” you don’t need to pay taxes because the tax system wasn’t constitutional” or “you can put money in foeign trusts and not be taxed or some other crazy theory about why you don’t need to...Read More

Maximizing your rental property depreciation: When you buy investment property, you MUST make an allocation between land, building and equipment ( such as washers, dryers, furniture, refridgerators etc. Land isn’t depreciable. The problem is that if you don’t make this allocation correctly, using some proof, the IRS will use the state assessor’s allocation,which usually is...Read More

How would you like to increase your rate of return for all investment or commercial property by as much as 8% per year? Knowing the difference between categorizing expenses as repairs vs investments can really make that much of a difference. Here is what you need to know: Build up repairs and not improvements for...Read More

You submitted your tax return and now you get a call from the IRS or Canada Revenue Agency to come in for a chat. What should you do? Here are 8 steps that you should know in preparing for the audit. 1. Always assume that you will be audited when you initially prepare your tax...Read More